Operative Blog

Hey CROs – Is Your Comp Plan at Risk?

The online media buying and selling process has changed – direct relationships with agencies and buyers has been reduced by the proliferation of ad networks, ad exchanges, social media platforms and RTB players that have cropped up en mass over the past twelve years, aiming to compete with a publisher’s direct sales channel.  Forrester research estimates that 30% of ad spending will be done via DSPs and RTBs in 2011, while Google estimates that more than 50% of online advertising will be done via these platforms over the next few years.

What does this mean for CROs at online publishing companies?  It means your compensation plan could be at risk.  If you are a CRO or senior digital media sales executive today, you are no longer competing head to head with other publishers to win the big RFPs.  Rather, you are competing with something much faster, and with a different skillset than your human sales team – you are competing with MACHINES.

Many of you have already embraced, or will embrace, this machine-based buying process.  You will compete with yourselves for inventory, most of the time by accident, because you lack visibility into the true value of your impressions.  In addition, many of you will compete or are already competing with machines today.  DSPs, exchanges and RTB players have the power to buy the same or very similar audiences, to the ones you represent today.  Your high reach, high frequency inventory, which used to be the reason you were so successful is now under fire by the machines and, because of this, the direct sales model of today and tomorrow is at risk.

Your revenue is at risk.

The way you and your sales people get compensated for deals will breakdown, if it has not already.

So how do you compete with something that’s faster than you, smarter than you, and doesn’t need sleep in order to be effective?

To hear what some of the leading online publishers think, come hear our presentation at the iMedia Agency Summit in Bonita Springs, Florida on Monday, May 23^rd.

Operative is hosting the Publisher’s Breakfast and will lead an enlightening, engaging conversation about the shift in online media buying and selling, and how these shifts are impacting, or will impact, your company’s revenue and compensation plans.

To help support the discussion, we brought together four of the “founding fathers” of online media – four gentlemen who are arguably the most recognized, well-respected thought leaders  in the field of digital ad sales. We invited them to participate in a pre-event Q&A and were pleased to even get on camera.  Our esteemed cast of characters includes:

• Nick Johnson from NBC Universal
• Kevin Arrix from MTV Networks
• Mark Westlake from Techmedia Network
• Brian Quinn from Triad Digital Media

During the session, you will hear this group talk about three things that publishers need to improve in order to grow their direct sales teams and drive more revenue through the channel.

These include:

1)    Plumbing – Compared to the machines, the current pipes that run water through publisher infrastructure are old and rotting – systems are fragmented and decision-making is hindered.  Imagine an Old Victorian water system, where every time there’s a leak, an entire street needs to be dug up in order to identify and locate the issue.

2)    Inventory – Inventory continues to become more complex to manage and understand, and often comes from multiple data sources. It’s rare that a seller knows exactly how much inventory is available for a segment, target or piece of inventory at the time of proposal.  That’s unacceptable.

3)    Product Packaging – It’s hard to create meaningful packages to takes to customers and impact your average price given issues 1 and 2.

We hope to see you next week at the iMedia Agency Summit…!

iMedia Agency Summit Publisher’s Breakfast Details:

-       Date: Monday, May 23d

-       Time: 8:00 – 9:00 a.m. EST

-       Location: Hyatt Regency Coconut Resort & Spa, Bonita Springs, Fl.

-       Room: Blue Heron Room

The world of creative in online advertising is constantly evolving. It seems that every month we’re reading about new types of creative that can be implemented on a publisher’s web site. While many still use plain images to do their advertising (and there’s certainly nothing wrong with that!), we are beginning to see that advertiser’s want to directly engage the user…and when they do, it leads to quantifiable results.

While Flash® is still considered ‘Rich Media’ by many, it is quickly becoming ‘standard’ creative in this day and age. Flash® ads are now so common that even as a user myself, I do not feel that it captivates my attention like many of the newer brands of creative – ads such as push-downs, interstitials, and floating ads, while sometimes annoying to the user, also present a better opportunity to capture the user’s attention.

So if you are a publisher and want to get involved in the freshest types of rich media, here are 3 things to know so that you aren’t caught off-guard by the newest creative types.

1. Rich Media Vendors are the way to go.

If you’ve yet to take a dive into the world of rich media, know that there are specialists out there whose core competency is building and serving high-end rich media. Providers such as Pointroll, Media Mind(formerly Eyeblaster) and Eyewonder specialize in this type of work, and can handle any questions you may have about rich media as well as assist you and your advertiser in the creation of your product. Operative has developed partnerships with several of these vendors as well- reach out to us if you would like an introduction!

2. Rich Media creative is served differently than standard creative.

Standard ads are served through an ad tag on your website. These ad tags contain a specific size and directly correlate to a specific position on your page. There is very little complexity here. When delving into a high-end rich media creative, the equation changes. Take a “pushdown” for instance:  This ad is meant to load as a standard ad, but when you mouse over it, it “pushes” the content of your page down as the ad expands to a greater size. To create this type of movement, the code within the ad interacts with the code on your web page, creating this action. Obviously this can be a complicated process, which leads us to…

3. There will be some frustrations!

Most publishers can attest to the struggles obtaining creative in time for an on-time campaign launch. When using rich media, the struggle may increase. As a publisher, if you know you are going to be using rich media, it is best to plan for it! Rich media creative often require extensive testing in a custom set-up test environment (make sure you have one!) before setting the creative live to your actual web page. These ads often do not work the way you expect them to on the first try, so it’s imperative to test them before launch. This, of course, means you’ll need the creative in your hands well before the launch- so make sure you plan ahead for this when scheduling campaigns and working with a creative developer!

Diving head-first into the world of rich media is an exciting step for every publisher…and can lead to increased revenue. But know that a lot of work, and often times, a lot of patience is a part of the package! All in all however, employing rich media on your site can be a tremendous benefit to both you (higher CPMs), and your advertisers (more customers)!

For more information, please click here.

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Blogged by Christopher Lane, Operations Manager

Operative provides outsourced Ad Operations for both agencies and publishers across the globe. Chris Lane is one of Operative’s senior technical and tactical experts for all things Publisher, providing advice to publisher clients on a variety of subject matters including campaign performance to troubleshooting and product optimization.

According to the Bain Study “Building Brands Online”, in the next 3 years, brand marketers will spend close to 40% of their budget on cross-platform campaigns (up from roughly 25%).  That’s about $52,000,000,000 being spent on cross platform campaigns in the near future.  Unless you start making changes in your organization to satisfy this new rise in demand, you won’t get a dime of it.

Let’s explore why.

What do these new demands look like for marketers?                            

A marketer looking for ‘cross-platform’ means they want to use multiple advertising platforms or vehicles to convey an advertising message.  For example, a brand like Nike may want to reach women at home, on the move, during recreation and at work.  To do that, Nike needs a number of options to distribute the advertising message: display media, online video, mobile, social media, TV, outdoor, newspaper and magazines.  And, the list continues to get longer.  For example, in the last 2 months, hundreds of publishers scrambled to build their iPad app, knowing that a decent percent of their audience will flee to the digital magazine version of their product. 

Marketers are starting to require multiple touch points in their campaigns, increasingly digital.  The people who spend the money are aware that digital is an accountable, efficient way to build brand equity and are putting pressure on their marketing departments to become more cross-platform as a result.  They are looking to get a single message to a consumer across different digital and non-digital advertising channels.  In fact, according to the Marketing and Media Ecosystem 2010 Booz & Company analysis, 89% of all marketers are developing ideas that cross media platforms, including digital.        

What can media owners and publishers do to keep up with these demands?

Let’s take a break from the macro-level talk and get into the day to day reality of the situation.  The media buyer that you met at a cocktail party nine months ago calls you up. 

“Hey – long time, how are you?… Great, great…Listen, we are doing this thing for my client and they are trying to reach men between the ages of 18-49 that are interested in buying a car.  And um…they are really trying to do this across multiple outlets…something that covers all the standard online ad units, but something that’s custom too.  So, if you could put together something that’s standard, custom, across video, mobile, online, social, that’s targeted to male car buyers between the age of 18 and 49 that live in the north east, that’d be great.  Oh, wait, I need it by this Friday OK?  Thanks, you’re the best.”

Only 1 type of publisher will get this order- the one who CAN execute.  If you can’t scale, you’ll spend all of your time reacting to these requests and looking for data.  This leaves very little time to sell, brainstorm and get creative. 

Translation – you likely won’t get this deal. 

So, what’s holding publishers back from executing cross-platform campaigns?

1.    Technology and data fragmentation is still a huge problem.  A typical publisher uses 30+ systems to run their business.  The data is fragmented, yet absolutely necessary to access to stay competitive in this new market place.  There’s one ad server for video, one for mobile, and one for display.  If you want to include a TV component or a print component, there’s a whole different set of systems to access to see if the inventory even available, and at what price.  If you plan to offer ad space on an iPad app, well you have that to deal with now too. 

2.    Business resources necessary to complete the RFP or contract oftentimes don’t even sit on the same floor- let alone same office. You may have other sales teams within your company that you may need to consult with to get them on board with your client’s ideas.  They are usually removed from your digital business goals, have not been vested in the process of selling to this client, and have their own agendas in mind. 

3.     Ad operations teams are typecast and segmented by the media they implement.  For many publishers, one team traffics standard and display rich media.  Another team traffics mobile or uses an outsourced mobile ad network.  TV and print production teams don’t even sit in the same office as you.  These are not ideal conditions for selling a cross-platform deal.

What can publishers do about it?

1.    Take a leadership role by getting all of your data in one place for Sales.  Plan for the future.  According to the Ecosystem study mentioned above, 67% of media owners said they need to upgrade their supply chain capabilities in 2010.  Part of this investment translates into having one screen to access your inventory, products and rate cards available for video, mobile, display, social and even TV, radio and newspaper.  This needs to happen, regardless of the number of ad servers or execution systems you may use.  Integrate it all into one central place so at the time of proposal, Sales has all the information they need when they get the call from that media buyer. 

2.    Centralize ad operations teams and production resources.  Fragmented ad operations teams are unable to help sales drive revenue that comes from cross-platform.  While it would be difficult (today) to have the same ad ops team that implements TV also traffic digital, there are steps you can take to move in the right direction.  Get everyone communicating with each other through one platform.  The carrot is integrating their specific ad system into the platform that everyone uses.  This will make them want to be on that platform.  By merging several departments onto one system, new proposals, orders, demands and alerts from a cross-media sales teams would be visible to everyone. 

How do these steps help publishers deliver cross-media campaigns?

By implementing these steps, Sales will be able react quickly to client demands.  They will also have more data to educate buyers and move upstream in the buying process, getting closer to the people holding the budget.  Executives can get a larger share of wallet from existing and new customers.  Ad operations and production resources can become a strategic partner to ad sales teams and help provide a competitive advantage over other publishers competing for the same dollars.

Of course, this is not easily done.  Someone with influence in your company needs to step in and be the VP of Change.  Someone who has power.  Someone that cares about revenue.  That cares about your brand.  Someone that is forward thinking enough to adapt before it’s too late.  If you can get the right people behind you, integration of data becomes easier, centralization of operations starts to fall into place and the company will start to rally towards a common cause- $52,000,000,000.

For more information, please click here.

The Internet is allowing people to report, read, comment and blog about the news.  The web has encouraged opinion editorial and not just facts.  This landscape is changing the way we consume content.  The Huffington Post averages 2 million comments a month.  Consumers want a chance to interact with the news and to allow people to share it and be social. 

For the Huffington Post, technology is allowing them to run a much smarter and more efficient business.   

If it is the golden age of news, why is Huffington Post more entertainment?  The answer is all about what the consumers want to read.  If they like pop culture, HuffPo can offer more of that. 

Quality journalism…is it in the eye of the beholder?

For more information, please click here.

Definition: Extrapolate- http://www.merriam-webster.com/dictionary/extrapolate 

Still in the year 2010, Publishers lose sleep over inventory and how best to manage it to optimize revenue.  As we discuss this vexing conundrum with the publisher audience, the most common themes continue to be:

1. We have SICK excel formulas and tables that help us extrapolate our available/sell-able inventory.

2. We have clients that want us to dive deeper into our audience…in addition, the advertiser wants to geo-target. So, extrapolating the data and conveying the inventory is a PAIN.

3. Using charts and images to extrapolate the inventory data is pretty sweet.  But, again, creating this in excel is sub-optimal.

How do you extrapolate your web site inventory? What solutions have you come up with that other digital publishers could learn from?  Post a note and let us know.